Threat of huge EU penalty looming

Greece faces the possibility of having to pay back over a billion euros in EU funding when the European Commission discusses in less than two weeks what penalties Athens should face over the mismanagement of public works, sources said yesterday. The matter headlined the agenda yesterday in Athens talks between the Greek EU Environment Commissioner, Stavros Dimas, and Prime Minister Costas Karamanlis. Dimas conveyed the concerns of EU Regional Policy Commissioner Danuta Hubner, who is in charge of bringing Greece to task over the handling of a number of projects funded by money allocated through the Third Community Support Framework (CSFIII) between 2001 and 2003. Athens may have to return some 1.2 billion euros to Brussels because of claims that some of the works were delayed, overpriced and, in several cases, never actually began, even though the funds had been handed over. Last October, Hubner sent a memorandum to the College of Commissioners informing them that Greece had failed to live up to promises made by the PASOK government in 2001 to develop an improved mechanism to conduct and oversee building projects financed by EU funds. On May 17, the Commission is due to discuss how much money Greece should lose from CSFIII, which runs until 2006. It is expected that Athens will try to ensure that it will not have to return more than 800 million euros.